AUSTRALIAN financial markets have reacted positively to the Labor leadership spill, with expectations new Prime Minister Julia Gillard will overhaul the controversial resource super-profit tax (RSPT).

“We understand that Gillard is a supporter of the RSPT, the current proposal following the Henry Review was largely drafted by Rudd and Swan,” Ms Ong said.

“Given the backlash from the business community and limited public support, the new leadership team is a good excuse to change the RSPT in its current form.

“We expect the new PM to announce a watered down version of the RSPT in the coming weeks. The most likely changes will probably be to the uplift the rate, tax rebate on losses over the investment life of projects, and concessions for particular commodities although we would not rule out any tinkering to the proposed 40 per cent rate of tax.

“There is also the outside chance that the RSPT is dumped all together. This, however, would be poor long term macro policy as political survival dictates.”

The research indicates that scientists who blame human activity for global warming have published more relevant and influential papers than those who question man’s impact.

But the study, published in the Proceedings of the National Academy of Sciences, has been dismissed as misleading by critics.

Opponents said that the paper divided scientists into artificial groups and did not consider a balanced spectrum of scientists.

They also pointed out that climate sceptics often struggled to get their papers accepted by journals, as they must first be reviewed and approved by climate change “believers”.

Judith Curry, a climate expert at the Georgia Institute of Technology – who was not part of the analysis – called the study “completely unconvincing” while John Christy of University of Alabama claimed he and other climate sceptics included in the survey were simply “being blacklisted” by colleagues.

Iron ore is not a scarce resource but the ore price dominates steel price and a rising steel price – in turn – is a fundamental constraint on the rate of global economic recovery. Production of iron ore is dominated by just 3 players – Rio Tinto, Vale and BHP Billiton – and they are now under investigation by the European Commission and German authorities for building cartels.

The CEO of Thyssen-Krupp accuses them and speculators for jeopardising the economic recovery.

This is being compounded by taxation and the opportunistic Australian Resource Super Profits Tax would seem to be a case of shooting oneself in the foot !! A case of greed overcoming common sense perhaps?

Basic metal prices provide a solid sanity check and the recovery of metal prices is well underway. Recovery of Nickel price is a good indicator that specialised and stainless steels are back in demand again.

The steel cartel is becoming active again after having a couple of years with nothing to shout about, and seems to be mainly driven by the demand from China.